State-owned Janata Bank PLC incurred a net loss of around BDT 70 billion over the past two years. Following several financial scandals, irregularities and corruption, the bank’s non-performing loans (NPLs) have reached BDT 760 billion. Its capital shortfall has also exceeded BDT 640 billion. Last year, it spent BDT 15.15 billion on its more than 14,000 employees’ salaries and benefits. Despite its continued losses and capital shortfall, the bank is set to more than double its employees’ salaries. As the government has issued a gazette notification on the ninth National Pay Scale, the bank’s expenditure on salaries and benefits will double.
Basic Bank has more than 2,000 officers and employees. The state-owned bank, which was subject to widespread embezzlement after 2009, has been reporting losses continuously since 2013. Over the 13 years through 2025, Basic Bank incurred a net loss of BDT 63.23 billion. In this situation, concerned people believe the bank’s losses will become even heavier if salaries and benefits are increased without raising income.
It is not only Basic or Janata Bank; the financial condition of all nine scheduled banks owned by the government is broadly similar. Sonali, Janata, Agrani, Rupali, Basic and Bangladesh Development Bank (BDBL) are classified as commercial banks, while Bangladesh Krishi Bank (BKB), Rajshahi Krishi Unnayan Bank (RAKUB) and Probashi Kallyan Bank are classified as specialised banks. Of the nine state-owned banks, only Sonali’s financial position is relatively better at present, as it is making a profit by earning significant amounts from investments in government treasury bills and bonds. The other eight banks are under pressure from huge non-performing loans, capital shortfalls and provisioning deficits, and consequently are making losses.
According to data from Bangladesh Bank and the banks concerned, 71,578 officers and employees are currently working at the nine state-owned banks. The banks spent BDT 81.54 billion on salaries and benefits for this large workforce in 2025. With the implementation of the new pay structure for government employees, the banks’ salary and benefit expenditure will rise by at least 25 percent this year and exceed BDT 160 billion by 2028. Concerned people believe the banks’ financial condition could become even more fragile as they struggle to meet this substantial additional expense.
A chief financial officer (CFO) of a state-owned bank, speaking to Bonik Barta on condition of anonymity, said, “The operating income generated by several state-owned banks isn’t even enough to pay the salaries and benefits of their own officers and employees. These banks exhausted their capital long ago. They’re now essentially operating by drawing down depositors’ money. The banks have survived because of the widespread belief that ‘the government owns them, so they won’t go bankrupt’. People are still depositing their money with the banks.”
Economist Dr Debapriya Bhattacharya believes those responsible should consider where the funds to pay the increased salaries and benefits of loss-making banks will come from. The distinguished fellow of the Centre for Policy Dialogue (CPD) told Bonik Barta, “The government itself must find a way out of the situation in which state-owned banks currently find themselves. Increasing salaries and benefits to keep employees satisfied is one measure. But it’s also necessary to determine what improvement this measure will bring to the banks. Clear boundaries must also be set on how non-performing loans will be recovered and how the boards of directors and management authorities will discharge their responsibilities.”
Sonali Bank PLC is the largest among the state-owned banks. The bank came under criticism after 2009 over the Hall-Mark scandal. It is, however, currently in a relatively stable position compared with other state-owned banks. Sonali Bank, which is making a profit, spent BDT 26.49 billion on more than 21,500 employees’ salaries and benefits in 2025. As of June this year, Sonali Bank’s outstanding non-performing loans stood at BDT 157.1 billion, equivalent to 18.27 percent of its total loans disbursed. Sonali Bank generated operating income of BDT 57.85 billion in the first half of 2026 (January–June), according to the bank’s financial statements. But more than 83 percent of this income came from interest on government treasury bills and bonds.
After the 2024 mass uprising, former Comptroller and Auditor General (CAG) and Finance Secretary Mohammad Muslim Chowdhury was appointed chairman of Sonali Bank. But he resigned from the bank on March 2, citing personal reasons. The government has not appointed anyone to the post since then. Former civil servant Mahbubur Rahman is currently serving as the bank’s chairman in an acting capacity.
He told Bonik Barta, “In any country in the world, bank employees’ salaries are determined based on the performance of the bank. In Bangladesh too, salaries and benefits aren’t increasing in the same way at private banks that have become weak, and promotions have also been stalled. But despite state-owned commercial banks being registered as public limited companies in 2007, their ownership structure remained under government control. So it’s only natural that the salaries of their employees will increase when the government pay structure is revised.”
The former CAG also said, “Apart from banks, there are many other government-owned institutions and companies that operate for profit. The government needs to adopt a different policy for them. If a company makes a profit, its employees will receive bonuses, while losses will result in penalties. If this policy can be implemented, government institutions will also be compelled to return to profitability.”
Janata Bank PLC is now in the worst financial condition among the state-owned banks. More than 75 percent of the bank’s loans are classified as non-performing at present. After incurring a net loss of BDT 30.66 billion in 2024, the bank posted a further loss of BDT 39.31 billion in 2025.
Once regarded as the best bank in the public sector, Janata was largely subjected to plundering after 2009. Members of the bank’s board of directors, management and officials at various levels were involved in the process.
Janata Bank currently has 14,323 employees. The bank spent BDT 15.15 billion on their salaries and benefits last year. With the implementation of the ninth National Pay Scale, the bank’s expenditure in this sector will double, potentially making its already fragile financial position even more precarious.
State-owned Agrani Bank is also under pressure as nearly 44 percent of its disbursed loans have become non-performing. At the end of June, the bank’s NPLs stood at BDT 321.33 billion. With no income being generated from this huge volume of non-performing loans, Agrani Bank has fallen into losses. Last year, the bank spent BDT 13.31 billion on salaries and benefits for its 11,300 employees.
Asked where the additional expenditure arising from implementation of the new pay scale would come from, Agrani Bank Chairman Syed Abu Naser Bukhtear Ahmed told Bonik Barta, “Many people are asking me this question. If a bank makes a profit, employees’ salaries will increase; they will receive increments and bonuses. These are common practices around the world. But the reality is that, at present, no state-owned bank other than Sonali Bank is making a profit.”
He also noted, “Compared with many private-sector banks, employees of state-owned banks receive lower salaries and benefits. Implementing the new pay scale will eliminate this disparity. Key performance indicators (KPIs) must also be set for state-owned banks. If a bank performs well, its employees should be rewarded; if it performs poorly, they should be reprimanded. That should be the rule.”
Rupali Bank, another state-owned lender, is also facing mounting losses due to rising non-performing loans and stagnation in its operations. The only listed state-owned bank on the capital market incurred an operating loss of BDT 6.4 billion in the first half of this year. Last year, the bank spent BDT 7.22 billion on salaries and benefits for its 7,164 officers and employees, and its expenditure in this sector exceeded BDT 4 billion in the first half of this year alone. If the new pay scale is fully implemented, the bank’s expenditure on salaries and benefits will also double.
The outstanding amount of loans disbursed by the nine state-owned banks stood at BDT 3.69 trillion as of June this year, according to Bangladesh Bank data. Of this amount, BDT 1.69 trillion had been classified as non-performing loans, accounting for 45.89 percent of the disbursed loans. Under pressure from this huge volume of NPLs, all nine banks are at risk.
The specialised Bangladesh Krishi Bank is in the most precarious position in terms of losses. The bank incurred a net loss of BDT 82.18 billion in the 2024–25 fiscal year, while it had previously incurred a net loss of BDT 65.13 billion in the 2023–24 fiscal year. Due to continued losses and a high NPL ratio, the bank’s capital shortfall has now exceeded BDT 300 billion. The Bank has 9,430 officers and employees, and spent BDT 12.42 billion in this sector in the 2024–25 fiscal year alone.
The financial condition of Rajshahi Krishi Unnayan Bank (RAKUB) and Probashi Kallyan Bank is also quite precarious. RAKUB incurred a net loss of BDT 2.94 billion over the past two fiscal years, while Probashi Kallyan Bank incurred a loss of BDT 1.62 billion in the 2024–25 fiscal year. Meanwhile, Bangladesh Development Bank incurred a loss of BDT 690 million last year.
Asked about the doubling of salaries and benefits for employees of state-owned banks despite their continued losses, capital shortfalls and precarious financial condition, Bangladesh Bank Executive Director and spokesperson Arif Hossain Khan told Bonik Barta, “State-owned banks are still fully owned by the government. The Financial Institutions Division is responsible for overseeing these banks. It will decide what kind of decisions should be taken regarding them. From Bangladesh Bank’s side, we audit and supervise state-owned banks. If we find any irregularities, action is taken against them.”
Financial Institutions Division Secretary Nazma Mobarek declined to comment when approached for her views on the matter.